The transformation train is leaving. Powered by the promise of technology and design thinking, companies worldwide are scrambling to find a seat before disruption disrupts; across industries, somewhere around $2 trillion is going to be invested in “digital transformation” before the end of 2019 (here’s the data point). Two years, $2 trillion…that’s roughly the size of India’s GDP. That’s a very big spend.

Structural change has occurred. It is not a “happening” so much as it is a “now.” Deep, inevitable forces have re-configured how the world thinks, interacts, creates, communicates…and in what they value.

The bleeding-edge of the next generation expectation — Amazon, Tesla, Uber, Netflix, Zappos, AirBnB, Alibaba, Google — understand how to shape the future because they understand how to harness these new forces within organizational culture and business strategy. These companies are hybrids guided by a new type of thinking — part human, part machine — embedded in an engine of constant flux. Legacy industries, including (but certainly not limited to) the global healthcare system, are struggling to adapt. Said better by William Gibson in 2003, “the future is already here; it’s just not evenly distributed.”

Networking capabilities have not only changed the economics of information, they have also changed the way people and organizations relate to one another. So besides a significantly more complex environment, the nature of self is more complex. This means that the boundaries between customer, competitor and collaborator are basically meaningless.

If this is true, then the conventional definitions of industry and market are similarly fluid. Which is the essence of our time. “Digital” enables; it dissolves boundaries; it removes friction. It is more a philosophy than it is a thing. These are the forces that Amazon and Uber understand so well, and are able to harness to deliver in a consumer-grade experience. These are also the same forces that are leading to many an industry’s identity crisis, including and especially pharmaceuticals.

It’s no secret drug companies are in an era of transition — they have been for quite some time. Seismic shifts are taking hold across the span of competitive, economic, political, regulatory, and social systems the industry operates in. The hot debates about drug pricing and value and industry survival at the JP Morgan Healthcare Conference this past week — and President-elect Donald Trump’s comment today that he would force the industry to bid for government business (Drug Stocks Plunge as Trump Threatens to Force Price Bidding) — are only the latest manifestation of a very long simmer.

“I’ve been in postwar Japan, pre-revolutionary Iraq, worked in China during the Cultural Revolution, and I’ve never seen a period of such uncertainty” — Pfizer CEO Hank McKinnell in 2001.

That was 16 years ago.

Outcomes-based pharma is not a happening. It is a now. Two charts reveal the accelerating shift in what the market values from what-was-formerly-known-as the industry who made drugs. This is from reporting by Modern Healthcare:

And from Tracy Staton at FiercePharma:

A value strategy flows from a new mindset. This has less to do with using technology to personalize promotion and push the feature-benefit story of a “drug” (or drug branding, depending on your perspective), than it does positioning a drug within a unique system of health. Outcomes are based on how the new system performs. The center-of-gravity for competition shifts to the system level.

Collaboration across sectors is key to this new narrative. Competing on outcomes means designing a new health experience that links and satisfies three perspectives simultaneously: the payer + the provider + the consumer. In other words, the unmet need in healthcare is ‘big design’ that solves for fragmentation and continuous consumer engagement, at scale. Sutter Health collaborating with AstraZeneca to develop a new approach for chronic conditions is a great example. But it’s an outlier. More of these collaborative business models are needed.

Against this backdrop of an infinite, accelerating cascade of change is another, even bigger shift that is a now: consumerism is the only real disruption in healthcare. This implies thinking well beyond “patient” and what happens in the clinical setting. In other words, all those technologies and solutions to improve “patient engagement” are under-conceptualized and doomed to perpetual pilot status (pilotitis [pahy-luht-ahy-tis] is the inability to break out of pilot stage).

Nick Vennaro, co-founder of Capto Consulting, writes

“Consumerism in healthcare is not yet at tsunami-level force, but it clearly represents an imminent and undeniable disruption in healthcare’s traditional business models. It is only natural that this trend is putting tremendous pressure on heads of marketing. It is also challenging CIOs to bring their expertise to bear, and to clearly articulate the role IT can play as healthcare organizations seek to transform the way they engage with their customers.”

Spot on.

“Digital” transformation is an operational construct. The basic idea is that you have all of these clunky old computers and technological processes that need to somehow become digitized and moved to the cloud. If you don't make this change, you risk becoming irrelevant and extinct. But a dinosaur in a fur coat is not a mammal. The pharmaceutical industry, like many other industries and governments throughout the world, are failing because they have not adapted to the breakdown of Industrial Age ideas.

A strategic transformation works with different assumptions about value, identity and boundaries. It blends both the CIO and the CMO agendas in a new market vision. For the “drug” companies to navigate the transition space they now face, this means thinking with a completely different sense of self.

In other words, before jumping into the deep end of desperately-seeking-digital-disruption, a bigger question to answer is this: transformation from what to what?

Initial conditions matter. Billions are at stake in getting the first step right.